Extending losses for the fifth consecutive trading session, Indian markets ended with a deep cut on Thursday as benchmarks closed with a cut of more than 2%. The benchmark Nifty 50 fell below 15,900 and the Sensex fell more than 1,100 points amid volatility as weak global indications continued to wreak havoc on domestic equity markets on Thursday.
Following the headline indicators, the Nifty Midcap and Small Cap Indices have declined by about 2% as uninterrupted profit booking continues in small cap and mid cap stocks. Amid high-charge action in the broader market, the India Volatility Index (VIX) has closed above the 24-mark.
S Ranganathan, head of research at LKP Securities, said the benchmark index fell 2.5% in afternoon trade on the back of weak global cues as investors booked gains unable to fix the puzzle of oil, war, currency, inflation and interest rates.
The expectation of higher CPIs in April, along with the margin pressure seen in the fourth quarter earnings, further strengthened the selling pressure on equities, which was evident in the annual low stock numbers today as the Sensex broke 53K with all sectoral indices, he said.
“With the safe-haven dollar pushing the dollar index to a 20-year high, investors now seem to be pinning their hopes on resolving the conflict soon,” the expert added.
Meanwhile, sector-wise, all Nifty indicators have plunged deeper and the banking, metals and financial services sectors have been hit the hardest in the negative market.
Among the stocks, Adani Ports, IndusInd Bank, Tata Steel, Echandalco, Tata Motors, Bajaj Twins, HDFC Duo, Titan, Axis Bank and State Bank topped the list.
Binit Bagri, Managing Partner – TrustPlutus Wealth, says Western markets have lost their initial profits overnight due to continued sales in technology, which has led to a wide range of sales shutdowns.
“The inflation print was higher than expected, encouraging a more aggressive rate hike in CY23 and a call for weaker global growth. And as the dollar index strengthens to 104, FIIs continue to sell EM space,” he said.
While the expected global GDP growth rate for CY22 / 23 is slowing, India is probably the only major economy that will grow at an average of 7% over the next two years, Bagri said. “So, we believe that once the selling pressure subsides and product prices / inflation starts to cool down, the Indian market should see a strong bounce back,” the expert added.